Russian State Duma gives first-reading approval to non-public credit ratings bill

Russia’s State Duma has approved at first reading a bill allowing credit ratings to be provided to a limited group of recipients specified in an agreement with a rating agency.

A group of lawmakers and senators led by financial markets committee chairman Anatoly Aksakov introduced the proposal. Information about a non-public rating would not be distributed to an unrestricted audience, apart from specified exceptions.

Aksakov argues that the format would give investors information about companies while reducing the risk of sensitive corporate data being disclosed under sanctions. He links the proposal to companies’ ability to raise financing without broadly releasing those details.

The bill would also allow ratings for bonds before issue registration, and for digital financial assets and digital rights before an issuance decision is signed. Aksakov says this could speed up placements.

The proposed conflict-of-interest rules would cover transactions with a rated entity and derivative contracts whose underlying assets include property of that entity, or of a person controlling it or exercising significant influence over it.